Stock (Symbol) |
Dollar General (DG) |
Stock Price |
$69 |
Sector |
| Retail & Travel |
Data is as of |
| July 11, 2017 |
Expected to Report |
| Aug 23 |
Company Description |
 Dollar General Corporation offers a selection of merchandise, including consumables, seasonal, home products and apparel. Consumables category includes paper and cleaning products; packaged food; perishables; snacks; health and beauty; pet and tobacco products. Seasonal products include decorations, toys, batteries, small electronics, greeting cards, stationery, prepaid phones and accessories, gardening supplies, hardware, automotive and home office supplies. Home products includes kitchen supplies, cookware, small appliances, light bulbs, storage containers, frames, candles, craft supplies and kitchen, bed and bath soft goods. Apparel includes casual everyday apparel for infants, toddlers, girls, boys, women and men, as well as socks, underwear, disposable diapers, shoes and accessories. Its merchandise includes national brands and private brands selections. It operates approximately 11,879 stores located in over 43 states. Source: Thomson Financial |
Sharek’s Take |
 Dollar General (DG) has lost all momentum as competition in the retail area has zapped profit growth down to 0%. Management first cut guidance unexpectedly last Summer, the stock tanked and has still yet to recover. For 2017 DG’s profits are expected to climb 0% as well. Still, this is a solid, well-run company. Management returns money to shareholders via acquisitions, dividends and big stock buybacks. Total store count went from 11,800 to 12,500 last year, and the company plans on adding 900 new stores this year and 1000 next year. DG’s also purchased 42 Walmart Express stores which opened as Dollar Generals this qtr. Last year, management had a long-term goal of 11% to 17% total annual shareholder return through profit growth and dividends, but qtrly profit Estimates are for 1%, 4%, -2% and 13% profit growth. But that assumes a better environment next year, which is rather unknown at this point. Last qtr the company only had 1% same store sales growth, and SSS is what retail stocks need to get moving. The thing is, this stock is down-and-out yet still has a P/E of 15 — which isn’t a real value. I would be excited about a turnaround if the P/E was 12. I will sell DG from the the Conservative Portfolio, but keep it on the radar. There’s just no momentum here. |
One Year Chart |
 This stock chart looks bad. At least the stock is hitting support here. Last qtr DG posted 0% profit growth which beat negative growth estimates. Sales grew 7%. The Est. LTG of 8% is below the 10% I like in conservative stocks. DDG pays a 1% yield, but that still brings the total estimated return to 9%. Qtrly profit Estimates are 1%, 4%, -2% and 13% but let’s not hold our breath on 13% growth. |
Fair Value |
 Dollar General has been a solid winner profit-wise the past 8 years. But now growth has slowed to nothing. My Fair Value is a P/E of 16 which gives the stock modest upside. The only good thing in this report is annual profit estimates didn’t fall this qtr. They had dropped the previous three qtrs. |
Bottom Line |
 Dollar General is experiencing a slow-down in growth, but the ten-year chart shows the stock is still in its long-term uptrend. My issue is I have a lot of other stocks doing well — as their companies are thriving in this economy. Thus, DG will be sold from the Conservative Portfolio. I like the company and will keep the stock on my radar. |
Power Rankings |
Growth Stock Portfolio
N/AAggressive Growth Portfolio N/AConservative Stock Portfolio N/A |
